Schröder rails at new low-tax kids on block

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SOMEONE has invented a new sin: tax dumping. You won’t find mention of it in biblical texts, nor does it feature as a form of renegade fiscal behaviour in standard economics primers. But it is troubling Gerhard Schröder, the German Chancellor, who is threatening retribution to any government that dumps its fiscal garbage in Germany’s backyard.

For tax dumping, read tax competition or, to put it simply, lower taxes. Cutting rates is the fashion in the fringe European states. Compelled to put their houses in order ahead of accession to the Brussels club, several new European states are not just